Despite a slight decline in occupancy rates and the looming threat of new U.S. tariffs under Donald Trump, the industrial real estate sector in Mexico continues to show resilience. Experts agree that while caution is evident in certain markets, demand for industrial properties in Mexico remains steady—driven by strong trade ties and the continued momentum of nearshoring.

Occupancy Levels Remain High in Industrial Real Estate

According to Javier Lemarroy, CEO of Whymexico.mx, the average annual occupancy of industrial real estate in Mexico before the pandemic was about 3 million square meters. In 2024, even with a slight dip, total occupied space reached 5.5 million square meters, nearly doubling pre-pandemic levels and signaling that the real estate market in Mexico continues to hold investor confidence.

Manufacturing and Logistics: The Engines of Growth

The industrial real estate sector in Mexico is powered by two key segments: manufacturing and logistics. The latter has been significantly boosted by the growth of e-commerce, requiring high-volume, fast-distribution warehouses across key regions.

Eduardo Vergara, Investment Director at Artha Capital, explains that demand from the automotive manufacturing sector was particularly strong in 2024. With 3.98 million vehicles produced and 80% exported to the U.S., the industrial real estate market in Mexico saw 39% of its demand from this segment alone—according to CBRE.

Nearshoring Supports the Industrial Real Estate Sector

While there is uncertainty related to potential U.S. trade barriers, the trend of nearshoring continues to drive investment in industrial properties in Mexico. As companies relocate operations closer to North American consumers, demand for logistics and manufacturing spaces remains firm—even as new investment slows.

Vergara notes, “We are in a transitional phase regarding tariffs, but the need for industrial real estate in Mexico has not declined. Demand continues—especially from multinationals expanding or consolidating operations.”

Infrastructure Is the Main Challenge

Experts agree that the primary obstacle facing the industrial real estate sector is not demand but infrastructure. Although new investments fell 40% in 2024, reinvestment in expansions grew by 115%, highlighting confidence in the real estate market in Mexico.

Lemarroy stresses the need for better planning: “We need more industrial inventory—larger, higher-quality buildings with utility access.” He points to Ciudad Juárez, where availability rates jumped from under 2% to 10% because companies are unable to operate in leased spaces due to electricity shortages.

Key Factors for Investment Success

To attract and retain investments in industrial real estate in Mexico, three conditions must be met:

• Strategic location
• Reliable energy supply
• Efficient permitting processes

Without these, companies may hesitate to expand. As Lemarroy states, “Governments must actively promote and incentivize industrial real estate development to remain competitive in this global trade environment.”

Conclusion: Outlook for Mexico’s Industrial Real Estate Remains Positive

Despite political uncertainty and protectionist rhetoric, Mexico’s industrial real estate sector continues to grow. The combination of strong manufacturing ties, nearshoring opportunities, and e-commerce expansion positions industrial properties in Mexico as a solid long-term investment.

With strategic improvements in infrastructure and regulatory processes, the real estate market in Mexico can meet rising global demand and remain one of Latin America’s leading industrial hubs.